Crossroads
He bet BIG on OPENdoor. Is his next stock a 350x? (BETR)
9/23/2025, 12:57:55 AM
Economic Summary
- The 2021 U.S. housing market was an abnormal outlier with ultra‑low mortgage rates and elevated home sales; using 2021 as a baseline to project near‑term origination/refinance growth is misleading and likely overstates TAM capture for mortgage platforms like Better.
- Mortgage rates are tied to the 10‑year Treasury; Fed policy rate cuts do not automatically translate into sustained lower 10‑year yields or a refinancing surge, limiting a rapid recovery in origination volumes.
- Better’s business model (direct consumer origination, HELOCs, and white‑label AI tools) could improve efficiency and scale without heavy balance‑sheet lending, which implies potential revenue leverage but still faces capital, competition, and margin execution risks.
- Meme and retail momentum can disconnect stock prices from fundamentals temporarily (seen with AMC/GME/others), so valuation spikes for names like Better or Opendoor (OPEN) may not reflect intrinsic economics.
Bullish
- Better’s AI (Tin Man, Betsy) can materially reduce underwriting costs and speed loan origination.
- White‑label/PLATFORM model scales without becoming capital‑constrained, enabling growth without heavy balance sheet use.
- Recent investor presentation shows improving unit economics and a path to adjusted EBITDA breakeven by Q3 2026.
- The stock may have been materially undervalued at recent low prices, enabling short-term momentum trades.
Bearish
- Valuation claims (350x/350-bagger) are wildly unrealistic and likely driven by meme/momentum trading.
- Better carries a massive debt load and faces dilution risk to raise capital.
- Returning to 2021 origination/refinance volumes is improbable given that year’s abnormal low rates.
- Fed rate cuts don’t guarantee a sustained drop in 10-year yields or a refinancing wave.
Bullish tickers
BETTERFIGURESOFIPYPL
Bearish tickers
BETTEROPENPLTR
BETTER
2 price targets
62612000
Bullish
Uses AI (Tin Man, Betsy), offers white‑label SaaS potential, improving unit economics, and claims path to EBITDA breakeven by Q3 2026.
Bearish
Valuation targets are speculative and rely on a return to 2021 volumes; company has significant debt and dilution risk.
OPEN
1 price targets
82
Bullish
Market disruption potential if its business model can eventually scale profitably; momentum trades possible.
Bearish
Has historically not been profitable and faces dilution risk; unlikely to sustainably reach lofty price targets.
PYPL
Bullish
Pays trades at a low price‑to‑sales ratio, which some argue could be an opportunity if fundamentals improve.
Bearish
Comparing PayPal to high‑multiple peers (e.g., PLTR) is flawed; doesn’t justify extreme multiple expansion.
PLTR
Bullish
Held by the presenter; he is slowly dollar‑cost averaging, indicating conviction despite valuation concerns.
Bearish
Used as an example of an overpriced comparable; assigning its multiple to other businesses is questionable.
CVNA
Bullish
Mentioned as a prior Eric Jackson call where he eventually profited, illustrating high‑risk/high‑reward outcomes.
Bearish
Carvana experienced large volatility and losses historically; cited as a cautionary example.
AMC
Bullish
None specifically cited in transcript.
Bearish
Example of meme‑driven volatility that can detach from fundamentals.
GME
Bullish
None specifically cited in transcript.
Bearish
Cited as a meme stock example that competes for the same retail capital.
SOFI
Bullish
Cited as a SPAC that did well once fundamentals and growth proved out.
Bearish
SPAC stigma can weigh on valuation absent clear fundamental progress.
FIGURE
Bullish
Operates in similar HELOC/mortgage vertical, supporting the thesis that tech can improve origination efficiency.
Bearish
Comparable but smaller; differences make direct valuation comparisons to Better imperfect.
People mentioned
CrossroadsEric Jackson